These file photos from July 2008 show the Freddie Mac headquarters in McLean, Va., and the Fannie Mae headquarters in Washington. Economists and analysts who follow the companies say the Obama administration is preparing to lean harder on Fannie and Freddie to help troubled homeowners avoid foreclosures _ and by extension the banks and other investors who own their mortgages.(AP Photo)

We taxpayers must wrestle with that question as the government cleans up our twin mortgage cesspools, Fannie Mae and Freddie Mac.

Combined, the two secondary mortgage companies have needed about $170 billion in taxpayer assistance and are now wards of the government. They lost more than $11 billion combined for the three months that ended Sept. 30 and have asked for almost $14 billion in additional aid.

Yet Fannie and Freddie are set to pay their top executives more than $95 million for work done since 2009, including about $6 million apiece for their chief executives this year.

For bailout-weary taxpayers, the hefty compensation is another slap in the face. While the pay isn't as outrageous as some of the pay packages we've seen in the private sector - Eugene Isenberg at Nabors Industries comes to mind - they offend for much the same reason.

Taxpayers are losing billions while the executives are being rewarded for not causing them to sink further. Do they deserve a reward for losing only $10 billion?

The pay has drawn fire from members of Congress who have demanded that the Federal Home Finance Agency, which oversees Fannie and Freddie and approved the pay packages, rescind them.

FHFA officials have defended the compensation, saying the executives involved were brought in to clean up the mortgage giants after the bailouts and weren't involved in the lending practices that brought Fannie and Freddie down. Those responsible for the failures left without severance, FHFA acting chief Edward DeMarco told lawmakers in response to the criticism.

It's worth noting that quite a few members of Congress from both parties were happy to lap up lobbying dollars showered on them by Fannie and Freddie back in the day while turning a blind eye to tighter regulations. They had more to do with the mortgage companies' failures than the current executives.

Compensation reduced

Executive pay at Fannie and Freddie has been cut by 40 percent in the past three years and is now comparable with jobs in the private sector, DeMarco said. Without incentives in line with the industry norm, though, the companies risk higher turnover, which could jeopardize their turnarounds.

In that sense, the mortgage giants face the same conundrum that often confounds bankrupt companies. If you don't offer an incentive, talented executives won't come to save the sinking ship.

Even if you believe, as I do, that Fannie and Freddie should be unraveled, you still need qualified people to do it. The cost of hiring the wrong executives could wind up costing the government more than the bonuses.

More provocation

While Fannie and Freddie's leaders may be making progress, for taxpayers, their compensation represents more of the same disparity that has caused widespread anger and has contributed to protests like Occupy Wall Street.

Once again, individuals reap big benefits while we shoulder the risk and get stuck with the bill.

Some of Fannie and Freddie compensation is deferred, but incentives need to be better tied to targets aimed at easing the effects of the housing crisis, such as increasing loan modifications or other programs to clear bad debts off the companies' books. And they need to be longer term, so that the payout comes as the burden on taxpayers is eased.

Taxpayers are going to be much more willing to pay for fixing failure once they see the repairmen have actually finished the job.